What could HR learn from the Chinese Social Credit System?

By Yves Lermusi | November 8, 2018

Do you consider yourself a good person overall? Someone who is fairly polite and aware of your behavior and choices and how they may affect others? Now imagine your Amazon and other purchases tracked, your social media behaviors analyzed, all your likes and dislikes recorded, your good deeds noted, and all your micro transgressions monitored and tallied into a score. That score can potentially open countless doors for you, both professionally and socially, could give you many privileges and elevate your social status, or instead could retract from the current lifestyle you are enjoying in innumerable ways. This is an initiative that the Chinese government is piloting, maybe you’ve already heard of it? Their idea is that they would create a comprehensive “social credit system” and it could fully launch by 2020. No, this is not a plot from a science fiction movie; this is real life, happening right now.

Their model so far looks a little like the U.S. credit system, but with a much broader scope than simply your ability to successfully pay off a house or other purchases. The motivation of the initiative is described in detail in this article Planning outline for the construction of a social credit system. One of the main goals is to increase trust between people in all different interactions, hence presumably making all kinds of transactions less risky, thereby supporting the further growth of China’s economy and strengthening their social structures among other goals.

On the surface of this proposal, it might seem like a pretty good idea. We’ve all heard the stories about the good old days when no one locked their doors at night, folks left their keys in their cars and neighbors knew everyone on their block. What if we lived in a society where you could truly trust everyone even if you didn’t personally know him or her? In this world, you could leave your wallet unguarded on a restaurant table, and you also had a way of punishing those people who aren’t nice or helpful at the car dealership, insurance company, or other corporate entity you deal with regularly (insert frustratingly annoying bureaucracy here). DMV anyone?? In this world, you wouldn’t have reference and background checks, the need for convoluted contracts of all kinds would virtually be eliminated and no one would be googling “how do you change culture in an organization?” because you wouldn’t have to! Everything would be amazing and awesome, right?

Unfortunately we know that it is not the case. We humans on some level need incentive. It’s how most of us are wired. We can always try to influence people to behave more ethically and give people incentives to do so. But would implementing a system to score people according to their trust level/good behavior actually work? And severely punish those who don’t measure up? That is the experiment here.

The game of earning and losing points.

So how would a social credit system work? You have a 1,000 points, which is a perfect score, but you might start losing some points if your dog is off leash where it shouldn’t be, or if you refused to do your military service. Maybe you paid your utilities bill late, smoked in a non-smoking area or wasted too much time on video games and social media. Then you’d lose more points. Spreading fake news? Deduct more points! Aside from all those infractions, more traditional offenses like committing corporate or personal fraud and embezzlement would also have larger impacts. For further reading, take a look at Business Insider’s article China social credit system punishments and rewards explained.

Under this system, the benefits of having better scores are widespread, ranging from faster internet, to being allowed to stay or become a member at luxury properties or enjoy special treatment on flights, sending your kids to the best schools, or of course getting the best jobs in state owned organizations!

If this grand experiment actually works, should companies consider this same approach? Or would we risk killing all creativity and innovation in our current and future employees? With a system like this in place, would people still feel free to disagree with each other? Would they want to “disrupt” and fight for their ideas and innovate in a way that would propel companies forward into a successful future? What about losing the impact of relying on personal and business references? What would it mean for culture fit, which we know is an important pillar of productive companies? And what about work safety? Would this approach allow unsafe or unfit employees to find their way into businesses simply because they were able to acquire more points somehow? Let’s consider that the points structure wouldn’t catch nearly all decidedly “bad” behaviors and might allow an opportunity for corrupt individuals to somehow game the system. It begins to sound less like a dream, and more like a nightmare.

We’d love to hear your views and reviews and I promise not to keep score.

About The Author

Yves Lermusi (aka Lermusiaux) is CEO & co-founder of Checkster.
Mr. Lermusi is a well known public speaker and a Career and Talent industry commentator. He is often quoted in the leading business media worldwide, including Fortune, The Wall Street Journal, Financial Times, Business Week, and Time Magazine. His articles and commentary are published regularly in online publications and business magazines. Mr. Lermusi was named one of the “100 Most Influential People in the Recruiting Industry” and his blog has been recognized as the best third party blog.

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